QS 20-30A (Algo) Merchandising: Computing merchandise purchases LO P4 Montel Company’s July sales budget shows sales of $620,000. The company budgets beginning merchandise inventory of $60,000 and ending merchandise inventory of $36,000 for July. Cost of goods sold is 30% of sales. Determine the budgeted cost of merchandise purchases for July. Hint: Use the relation (Beginning Inventory + Purchases − Cost of Goods Sold = Ending Inventory) to solve for purchases.

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